Petrol And Diesel Prices Remain Unchanged On July 1; Check Rates Across Major Cities

Petrol and diesel prices remained unchanged across the country on Wednesday, July 1, even as global crude oil prices eased following reduced geopolitical tensions in West Asia. Oil marketing companies (OMCs) kept retail fuel rates unchanged after multiple increases during the recent U.S.-Iran conflict.

The latest price revision comes at the start of a new month, with Brent crude trading above $73 per barrel and West Texas Intermediate (WTI) crude near $70. Although international oil prices have retreated to levels seen before the conflict, domestic fuel prices have not been revised lower.

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Petrol And Diesel Prices In Major Cities

Fuel Prices Stay Elevated

Retail fuel prices have risen by about ₹7.5-₹8 per litre since the beginning of the four-month U.S.-Iran conflict. The latest revision, announced last month, increased petrol prices by ₹2.6 per litre and diesel prices by ₹2.7 per litre.

With hostilities easing and restrictions on the sale of petrol and diesel to commercial buyers lifted, expectations of a reduction in retail fuel prices have increased. However, rates remain unchanged despite lower crude prices.

As per reports, under-recoveries of oil marketing companies have narrowed significantly. Even so, brokerages expect retail fuel prices to remain stable for now, allowing OMCs to maintain stronger marketing margins, similar to the trend seen in 2022.

Crude Oil Edges Higher

Global crude prices moved slightly higher on Wednesday as investors monitored developments in U.S.-Iran negotiations and the recovery of oil shipments through the Strait of Hormuz.

Brent crude traded above $73 per barrel, while WTI crude remained close to $70 per barrel after recording its sharpest quarterly decline since the pandemic. Market sentiment improved after senior U.S. officials indicated that indirect discussions with Iran in Doha had been constructive, while technical-level talks continued.

Normalization of flows of crude oil through the Strait of Hormuz, an important route through which almost one-fifth of the global trade in crude oil and liquefied natural gas takes place, has assuaged fears about extended disruption of supply lines.

What Factors Influence Fuel Prices?

Fuel prices in India depend largely on international prices of crude oil because India imports most of its requirements of crude oil. Exchange rate of Indian Rupees against US Dollars is another factor that impacts fuel prices.

Additionally, central excise duty and state value-added tax (VAT) make up a sizable component of the cost of sale at the retail level. Since the VAT structure varies from state to state, there is variation in prices of petrol and diesel between cities, even with the same fuel price.